Surge in travel two-edged for New Zealand economy

Visitor numbers are slowly recovering, but more than a year of open borders also means the economic impact is being eroded by globetrotting Kiwis spending on holidays overseas.

Statistics NZ figures for the year to August show visitor arrival numbers at 2.695 million, their highest since mid-2020, but still well below a peak of just below 4m before the pandemic.

ASB economists say annual arrival numbers by source country are well below pre-pandemic highs for all major markets, particularly Asia.

China re-opened its border early in the year and visitor numbers from what was once the country’s second-biggest market edged up to 88,274, but are well below pre-pandemic highs of around 450,000.

“Also likely dampening the prospective boost from tourism and the NZ economy is that there is still strong pent-up demand for overseas travel from Kiwis,” they said.

There were around 250,000 short-term resident departures in August, taking the annual total to 2.572m.

“With more money heading offshore as Kiwis travel abroad, this suggests considerably less support to domestic spending,” ASB says.

Stats NZ said the number of visitor arrivals from India reached a record high of 70,000 in the past year, while tourism was also boosted by the Fifa Women’s World Cup.

The data shows India is the fifth-largest source of overseas visitors to New Zealand, behind Australia, the United States, Britain and China.

India’s ranking as a source has progressively risen from 19th in 2003 to 10th in 2013 and ninth in 2019.

About six in 10 visitor arrivals from India came to visit friends and relatives in the August 2023 year, compared with three in 10 in 2003, Stats NZ population indicators manager Tehseen Islam said.

“This mirrors the growing Indian population living in New Zealand and connections with India.”

Although there are no non-stop flights between the two countries, air service agreements have been expanded to allow them and airlines in India have direct flights on the radar.

Overall, there were 206,800 overseas visitor arrivals in August 2023, or 82 per cent of the pre-Covid-19 level in August 2019.

That was up from 129,800 last year, which was 52 per cent of the August 2019 level.

The Fifa Women’s World Cup was a big boost. About 14,000 more overseas visitors arrived from the United States in July and August 2023, compared with July-August 2019.

Overseas visitor arrivals have increased following the progressive relaxation of travel restrictions from early 2022.

An increase in the number of international flights landing in and departing from New Zealand reflects the rebound in travel. In August 2023, 2800 flights landed in New Zealand, compared with 1900 in August 2022.

And capacity will recover further during summer.

Slot data compiled for Barnz by Airport Co-ordination shows that in December, Auckland will recover to 92 per cent of pre-Covid frequencies and be back up to 96 per cent of pre-Covid seat capacity.

Tourism NZ chief executive Rene de Monchy said while a strong summer was expected, the agency was closely monitoring recovery as global economic pressures force consumers to tighten their belts and carefully consider their next holiday destination.

“We’re also facing fierce competition from other destinations, all vying for high-quality visitors. This means we need to work even harder to capture their attention by finding compelling ways of telling our destination New Zealand story.”

He said that during a time of global economic pressure, the contribution of tourism to the economy is critical. Spending by overseas visitors totalled $17 billion a year before the pandemic.

Between April and June this year, international visitors contributed $2.1b to New Zealand’s economy.